Can Multinational Enterprises Introduce New Institutions to Host Countries?

Abstract

Multinational enterprises (MNEs) have promoted vocational training concepts from their home countries as part of their social responsibility in order to acquire better skilled workers, while contributing toward an upgrading of Vietnam’s education system. Thus, they potentially become ‘Institutional Entrepreneurs’, an idea that has been marginally discussed in economic geography up to now. This article examines to what extent MNEs can implement home-country institutions, by carrying out cooperation projects with local schools. Based on 19 in-depth interviews with Japanese and German MNEs and other involved stakeholders, we conducted a qualitative content analysis. Using the skill formation system (SFS) concept and Boschma’s proximity approach, we find out that MNEs can influence regional education systems by introducing institutional elements of their home country’s SFSs. All four proximity dimensions - cognitive, social, institutional and spatial - play an important role for MNEs to select local schools as cooperation partners.